Talking with some hotel owners in Phuket, the Songkran festivities where very quite this year. According to the latest numbers coming in from Pattaya as well as Hua Hin, the numbers are showing no growth, rather a decline.
The main reason can be found for the heat wave that is taking grip over a large part of Thailand. Thai residents find it simply too hot to play out doors with water. While still the popular dates, 13th till 15th of April, enjoyed a steady level of occupancy, hotels drastically reduced rates to cope with the decline of demand during the days surrounding the Songkran week (-s).
Last year, Thailand enjoyed still a steady supply of Russian Tourists, which still haven’t significantly grown. Despite the hostile activities in the popular destinations such as Turkey and Greece, the sheer flux of tourist for the Summer season has still to come.
It is obvious that such disruptions put pressure on the rates, as hotels try to get the last amount of guests to top up occupancy. With increased supply of hotel rooms and decline in demand, a “Price War” has a devastating effect for the tourism industry according to Sanpech Supabowornsthian, president of the Thai Hotels Association Eastern Chapter. As many reduced their rates to cope with occupancy as low as low 60%, many hotels cannot afford to reduce even further.
Hotels managers try to find reasons why the price war starts, and many of the reasons are out side factors. A proper revenue management structure would assist hotel managers understanding the change in Supply and Demand, take notice of out side factors and react earlier to cope with the changes. A strong revenue management strategy would help you to prevent ending up in a price war. Long term vision, a budget plan and weekly updates on forecasts would help you to drive a healthier business. Interested how to keep it ‘Cool’? Contact us now.